Our problem is to choose the level of activities that will maximize or minimize

Our problem is to choose the level of activities that

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Our problem is to choose the level of activities that will maximize or minimize our  performance measure. Constraints:  are restrictions on activity levels. Resource limitations  Resource requirements  Accounting identities  Shadow Price:  is the change in the objection function result associated with one unit increase in 
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the right hand final value for a constraint. Porter’s five competitive forces Threat of new entrants Threat of substitutes Bargaining power of buyers Bargaining power of suppliers Intensity of rivalry  Barriers to entry can result from: Absolute cost advantages (in procuring inputs or being able to use technology) Extreme product differentiation (with very loyal customers) Scale or size economies Large capital requirements Legal exclusion of competitors (… public utilities, patents, exclusive licensing  agreements) Trade secrets Pure competition : P=MC=MR Demand curve is flat for perfectly competitive firm:  The firm is a price taker.  Its actions do  not affect market output price.   Is negatively sloped for a monopolistically competitive firm:  The demand curve has negative  slope, but is highly elastic because there are many close substitutes. And as the price makers, 
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  • Spring '14
  • Apland,Jeffrey

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